Premier Foods has agreed to buy the UK and Irish businesses of Campbell Soup for £460 million pounds (€665 million) and would finance the deal mainly through a rights issue.
The purchase of the British and Irish dry soup, sauces and stock cubes business is expected to enhance margins in the first full year, the company said in a statement.
"The Campbell's UK business fits Premier like a glove. The acquisition will bring an excellent portfolio of powerful and iconic brands which we intend to drive forward with increased resource and innovation," Robert Schofield, Premier chief executive, said in a statement.
"The company intends to fund the transaction primarily through a rights issue at a minimum subscription price of 160 pence per new ordinary share to raise gross proceeds of approximately £450 million," the company said.
The rights issue has been fully underwritten by Merrill Lynch and Hoare Govett and the issue price and the number of new ordinary shares will be determined in late July.
Shares in Premier Foods closed at 309-1/2 pence yesterday, valuing the group at around £767 million (€1,108.9 m).